Study: US investors overweight in stocks despite market fears

NEW YORK (Reuters) – Three out of four US investors age 40 and older worry about a correction that will eventually end the long-running bull market in stocks, yet most refuse to head for the exits.

Sixty-nine percent of older investors are heavily exposed to equities, according to a national study released on Tuesday by Global Atlantic Financial Group, potentially leaving many of them ill-positioned for the inevitable downturn.

“Investors felt the pain from the 2008 financial crisis, but our study indicates many are not prepared for another significant downturn,” said Paula Nelson, the head of retirement distribution at Global Atlantic.

The study was conducted in October and November by Ebiquity, an analytics firm. It polled 1,005 people who invest in equities through individual stocks, exchange-traded funds, mutual funds, 401(k)s and individual retirement accounts.

Fifty-nine percent of employed investors said a significant stock-market drop would delay their planned retirement date; 25% of retirees said it would disrupt their retirement.

Nonetheless, 52% said they believed the stock market could sustain continued growth for five years without a downturn of 10% or more.

According to the Global Atlantic study, the most popular investing strategy is steady income-focused investments (34%), followed by protecting/ capital-preservation investments (26%) and growth (24%).

Women appeared to be more conservative than men. Forty-three percent of women said they placed a higher value on income, compared with 34% of men, while 30% of women highly valued capital preservation, versus 23% of men.

More than one-third of retirees, 36%, also placed a higher value on capital preservation, compared with just 19% of employed people.

Forty-six percent of investors said they found equities and fixed-income investments equally appealing, while 32% preferred equities and 22% preferred fixed income. More women than men preferred a mix, 52% to 38%.

The typical US investor 40 and over on average invests $210,051 in the stock market, while retirees on average invest $236,148, the study said.